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Changes in Direct Marketing Regulations for Scottish Businesses

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Changes in Direct Marketing Regulations for Scottish Businesses

Direct marketing is used in Scottish businesses, charities, and other organizations to reach out to prospective customers, current customers, possible future donors to charities, current ones, and previous ones. Where organizations run into difficulties is in the use of data, and whether they’ve been given express permission to contact the person or company either by text message, phone call or postal service.

Permission to Contact: A Changing State of Affairs
In many cases, permissions have not been so refined in the past to clarify what is acceptable for contact and what is not. Therefore, some people and organizations may have given permission by ticking a box on a form or a card which covers all three activities (text, call and snail mail) even though subsequently they would have preferred, perhaps, to have said no to text and calls, but yes to use of the local postal service to contact them.

While it would have been preferred that permission was previously sought and given for each contact method individually, charities and organizations that use direct mail quite often find it challenging to know what contact method is best while not wishing to upset the person being contacted. As it turns out, depending on the type of communication, people have strong, often unstated preferences in this regard.

Data Protection is Present Across Europe
The Data Protection Directive in the European Union was introduced in 1995 and covers a fair amount of issues surrounding how data should be managed. As a result, organizations across Europe are well versed in this regulation and what it means for using it appropriately. This is certainly an interesting point for organizations because of the many recent data breaches hitting the headlines across Europe in the recent months and how it has a bearing on data security concerns.

New Data Protection Regulations
The General Data Protection Regulation was introduced in early 2016 and on May 25, 2018, it will come into force covering European policy, including that in Scotland too. Scottish business will need to be aware of the changes, which reflect an updating and refresh of the original legislation. It modernises it to reflect changes in how data is to be managed, the impact of the internet, data held in the cloud, and other major changes that have happened since 1995 when the net was in its infancy.

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Opt-in vs Opt-out
The Institute of Fundraising, which has 3,000+ charities as its chief concern is concerned about the new rules coming into effect soon. Of most concern is what is seen as grey areas where things are still not clear.

At times, charities have taken an opt-out approach where unless someone has expressly opted out of wanting communication, they have still considered whether to initiate marketing to them. Doing so hasn’t always worked well because not everyone remembers providing the charitable organization with their contact information and are surprised to hear from them. Indeed, vocal proponents of an “opt-in marketing only” approach include prominent marketer and author Seth Godin who penned the book “Permission Marketing” on this very topic over 17 years ago, before it becomes a topic of much discussion.

 

When Opt-out Isn’t Really Opt-out
The new legislation makes it clearer that organizations, including both businesses and charities that wish to contact a person or organization via text or email, do need consent from the other party prior to doing so. This we should consider as the “opt-in” marketing approach. However, there’s a significant wrinkle to the opt-in approach, which we’ll discuss below.

It is possible for a charity to still contact the person or organization by text or email, even if they have opted out, under the idea that there is still a legitimate interest or fair reason for doing so. Under the legitimate interest basis for contacting someone, their data can be retained even if they have not opted in and gave no express permission to contact them using direct marketing or other methods.

How Will the New Legislation Affect Charities Seeking Donations?
Depending on the organization and especially for charities, they are likely to think carefully about whether to play it safe when deciding who to contact. Sometimes charities are somewhat aggressive in their tactics to raise funds for their operations, so it’s a sticky subject for many people who have been called up out of the blue at an inopportune time of the day.

Certainly, some charities will take the new regulations with a pinch of salt because if anything it gives them too much ability to contact someone when they haven’t opted in at all. When calling to try to raise funds, be it soliciting a charitable donation, making what is essentially a cold call is more likely to alienate a possible future donor rather than lead to a fresh agreement to make a donation. As such, whether there’s a legitimate reason to contact someone in the eyes of the EU regulations coming into force in 2018, many charities will prefer to not push their luck.

How Will the New Legislation Affect Direct Marketing Activities?
With direct mail activities by charities and other organizations, they will have to decide how they wish to proceed when there’s no opt-in present in the contact’s records. They are still allowed use a direct mail service to send carefully designed messages inside business envelopes like these that will grab the attention of the receiver and are more likely lead to a higher opening rate.

Given the higher cost of mailings rather than email or text, it’s possible that direct marketers may use other contact methods to seek further permission to get an opt-in for direct mail first. Doing things this way initiates a light contact without causing any offence and seeks to update the contact’s records with a more recent opt-in agreement that the organization can safely work with. Charities are also able to use this kind of approach when they prefer to use direct mail for certain weightier communications like a promotional magazine sent to previous donors who haven’t contributed in several years.

Data Profiling of Donors
Under the new rules, it’s still possible for a charity to keep data on a contact that enables them to profile them for contact. However, people must be informed when information held about them is being used in this manner. This is an important change that is likely to be fully embraced by the charitable community as a whole, and companies involved in direct mailing activities too.

Playing Safe is Probably a Better Strategy
Many companies in Scotland and elsewhere in Europe are revising their internal policies in anticipation of the coming legislative change. Staying on the right side of the regulations is clearly a concern, but doing right by the people they contact is also of paramount importance to protect the reputation of the business or charitable organization.

The collection of information about people and how it is used is a hot topic currently, especially with the changing rules for organizations and the problems with protecting data from mischief. It will certainly be of some comfort to people that they have a right to know when their data is being used to group them together with others in a profiling effort. While the upcoming changes are likely to provide continued opportunities to contact people, even when they haven’t expressly opted in, it’s good to see that charities and other organizations are often taking a more responsible approach in this regard.

 
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